Ambrx has entered into a new collaboration with Bristol-Myers Squibb to discover and develop antibody drug conjugates, or ADCs, in oncology. In a deal strikingly similar to two others it has made in less than a year, the San Diego-based biotech will use its site-specific conjugation technology to create optimized therapeutic candidates against cancer targets selected by Bristol-Myers.

The Big Pharma is paying Ambrx $15 million upfront plus research funding, and potential development, regulatory and sales-based milestone payments of up to $97 million per product resulting from the collaboration. Bristol-Myers will have worldwide rights to develop and commercialize any product candidates resulting from the collaboration. Ambrx is eligible to receive royalties on net sales.

The deal adds to a similar potential $300 million deal struck with Astellas Pharma in early April that also included $15 million in an upfront payment, and a potential $303 million deal struck with Merck in June 2012 that came with a $15 million upfront payment.

Ambrx has struck on a winning formula. More importantly, it speaks to the strength of its next-generation antibody drug conjugate technology. ADCs permit the targeted delivery of drugs to specific tumor cells and allow for increased payloads with less fear of toxicity to surrounding tissue.

The improved therapeutic efficacy of recently approved ADC-based drugs such as Seattle Genetics’ Adcetris and Roche’s Kadcyla have led to a growing number of Big Pharma deals with biotechs to apply ADC technology to their targets. The approved drugs were developed using first-generation non-specific conjugation technology that have less-than-optimal safety and efficacy properties because they produce a mixture of therapeutic candidates, according to Ambrx CEO Lawson Macartney.

In contrast, Ambrx’ technology enables site-specific linkage of the antibody and drug, creating a best-in-class antibody drug conjugate. This is achieved through the insertion of a non-natural amino acid, which enables control over the site of conjugation, says Macartney. In preclinical testing, Ambrx ADCs have shown high potency and a wider therapeutic index than ADCs created using non-specific conjugation.

Ambrx was already collaborating with Bristol-Myers Squibb under two separate agreements struck in September 2011 that have led to two drug candidates, one for the potential treatment of type 2 diabetes and another to treat heart failure, both of which are being developed by Bristol-Myers Squibb. Ambrx also has its own internal pipeline, including a long-acting growth hormone that has successfully competed mid-stage clinical trials.